CHINA’S REGIONAL TRADE AGREEMENTS: THE LAW, GEOPOLITICS, AND IMPACT ON THE MULTILATERAL TRADING SYSTEM

This paper examines China’s recent movement in negotiating and signing regional trade agreements (R.T.As) in the context of the regionalism versus multilateralism debate in international trade law, focusing on the China-Hong Kong Closer Economic Partnership Arrangement (CEPA) and the proposed China-ASEAN Free Trade Agreement (CAFTA). The broader background consists of the potentially negative effects of regional trade arrangements like CAFTA, which may conflict with the economic goals of the multilateral trading system of the GATT/WTO regime. Countries, however, have a variety of non-economic considerations in approaching R.T.As, such as regional stability and national security. Furthermore, the literature suggests that although the economic benefits to members of R.T. As vary depending on the circumstances, at least they are apparent in some cases. This paper, after introducing the content and progress in the CEPA and CAFTA negotiations, discusses the geopolitical considerations behind China’s R.T.A. approach. It also analyses the legal status and WTO-consistency of China’s R.T.As. It concludes that while multilateralism still serves the long-term interest of trading nations for peace and prosperity, the multilateral trading system should accommodate regionalism in a fashion that strikes a balance between the economic and non-economic concerns of the various countries and the goal of broader liberalisation in global trade and investment. China, as a rising trade power with global influence, has the responsibility of promoting regional integration and global trade liberalisation in the interest of the aforesaid balance.